3 WLTP effects and how to tackle them
On January 1st, 2020 the European member states are supposed to switch from NEDC to WLTP in terms of CO2 ratings. What does that encompass for fleets and how should you deal with the changes? Here are the top three effects and how to deal with them.
1. Labelling confusion
For fair comparison’s sake, the EU allowed a transition period during which the WLTP values can be recomputed downwards to a so-called NEDC 2.0 value, which is closer to the old NEDC number. That transition period is now coming to an end: by January 1st, 2020, EU member states should abandon all NEDC communication. Only WLTP figures will be visible on price lists, in commercials, on vehicle information sheets in the showroom, and so on.
Advice: Now is the time to make the switch to WLTP numbers in your car policy. You can increase the CO2 caps for your vehicle categories to accommodate for the higher WLTP values and thereby maintain the existing vehicle choice for your employees, but that will increase your TCO. The alternative is to keep the old NEDC-based CO2 values and use the transition as a lever to go for low-to-zero emission vehicles, such as hybrids and EVs, the TCO of which becomes more competitive thanks to WLTP.
2. Beware of optional equipment
A major change between NEDC and WLTP is the fact that optional equipment that affects weight and/or aerodynamic performance is taken into account for the CO2 rating. Especially bigger tyres add to the CO2 emissions of a vehicle.
Advice: Adapt your car policy to avoid the selection of CO2 increasing equipment. In the near future, you will be able to see the CO2 impact of optional equipment in the quotation tool of OEMs and leasing companies, allowing you to keep them from being selected by your drivers. Most fleet-oriented OEMs will also create specific ‘business’ models, clustering fleet-relevant options in a CO2-friendly package.
3. Taxation differences between countries
So far, only Germany and Finland have switched to the WLTP CO2 values as a taxation basis. The EU member states have until the end of 2020 to implement WLTP. Most of them are indeed likely to wait until 31st December 2020 to adapt their legislation.
Advice: Make allowances for local differences. Be aware of the fact that as soon as a country switches to WLTP, certain vehicles may not fit your car policy anymore because the tax increases. Ask your leasing company to calculate the tax effect in every country and adapt your policy accordingly.
In short, WLTP is an ideal opportunity to review your fleet policy and to do consider a global overhaul, including other areas that merit optimizing or innovating. ALD Automotive would be happy to assist you in the process.